Regulation

Congressman Patrick McHenry Calls SEC A “Rogue Agency” Ahead Congress Hearing

Published

3 months ago

September 24, 2024

US Congressman Patrick McHenry has called the US Securities and Exchange Commission (SEC) a “rogue agency.” This statement came before the congressional hearing where the SEC Chair Gary Gensler and the five commissioners will testify before the House Financial Services Committee. McHenry, the chairman of this committee, also stated that the Commission needs to focus on other things besides its enforcement actions.

Patrick McHenry Calls SEC A Rogue Agency

McHenry called the Commission a rogue agency during an interview on CNBC ahead of the SEC hearing. He made this statement while remarking that the hearing resulted from “four years of mismanagement at the rogue agency.” The congressman claimed that what they are trying to achieve through the hearing is to provide clarity on what the Commission should look like.

Partick McHenry added that the SEC is supposed to be balanced and move toward capital formation rather than “taking ad hoc action to sue people and make headlines.” He said that this will help provide clarity to investors in a “post-Gensler regime.”

Interestingly, the US presidential elections came up during the interview when the congressman stated that Donald Trump had outlined his plans for crypto and the capital markets. On the other hand, he noted that Kamala Harris has not publicly declared where she stands on crypto. However, at a recent fundraiser event, Harris promised to increase investments in the crypto industry if elected.

Irrespective of the perspectives of both these candidates, Patrick McHenry believes that Gary Gensler is no longer the right person to lead the SEC. Despite crypto looking to be a bipartisan issue, the congressman noted that a significant number of Decromats voted in support of the FIT21 crypto bill, which he claimed was like a “rebuke” on Gensler. It is also worth mentioning that Trump has promised to fire Gensler on his first day if he becomes the next President.

Rep Emmer Also Calls Out Gensler Ahead Of Hearing

Like Patrick McHenry, Rep Tom Emmer also called out Gensler ahead of the congressional hearing. He stated in an X post that he was looking forward to holding the SEC Chair’s “feet to the fire,” indicating he was ready to pressure Gensler and the Commission until they provide clarity for the crypto market.

Emmer had also previously stated that “the future of the peer-to-peer digital economy cannot be left to the authoritarian whims of Gary Gensler.” Meanwhile, in their push to provide a regulatory-friendly environment for the crypto industry, Senator Cynthia Lummis and Patrick McHenry called on the SEC to retract Staff Accounting Bulletin 121 (SAB 121).

They claimed that the regulation imposes undue burdens on crypto custodians. They also highlighted how it could negatively impact the industry.